Case Study 1 = Dakz Performance Sports Apparel
Module 2: Understanding the external environment
(External Environment – everything external to the organisation including but not limited to: Industries, Markets, Political Forces, Regulations, Environmental Issues, Society, Technology and a variety of other factors)
Q1 – Define Industry and advise about Dakz performance spots apparel Industry Definition (The grouping of similar economic or commercial activities that produce goods or services) Page 2.5 Dakz Performance sports apparel is into global athletic apparel and footwear industry. Dakz started making compression apparel for triathletes, before quickly diversifying into small production runs of cycling and runin clothes for athletes and active Australians. Dakz has expanded its business into broad range of performance,fitness and compression wear.
Q2- How would you determine this industry is global ?
To determine if te industry is global – We would consider the athletic apparel market goods traded globally. Dakz and other international brands like Nike, Addidas etc trade globally so we would be considered this industry to be in the global industry.
Q 3 – Define industry value chain and prepare value chain for Dakz. The Industry Value Chain (Athletic Apparel Industry) –
Comprises the business’ processes, people, organisations, technologies and infrastructure which transform raw materials into finished good or services.
Q4 – Define Industry life cycle and at what stage Dakz lies. Ans – Most Industries have a life cycle, similar to a product life cycle but much longer. Different strategies are required at different points in an industry lifecycle phase or stage. Throughout the life cycle, the structure and environmental an competitive forces that influence and industry change, As such, an organization needs to be adaptable. The industry would be considered to be in the mature stage of the industry lifecycle, this can be determined because at this stage :- Buyer start to have greater power – Buyer have alternative choices and brands and are easily able to compare price due to the availability of information on internet and availability of different brands in market and super markets. Focus is on efficiency, cost control and market segmentation : - Focus of Dakz on cost reduction due to that they have outsourced manufacturing of goods to china to reduce its cost. Industry rivalry is intensified : - Most of International brands like Nike, Addidas has already entered into Australian market and more options are available. Question 5 – P
Remote Environment Analysis (PESTEL) (factors influencing past growth in the industry and what is expected to drive future growth?) Page 2.23 ( Please refer yellow points for bottled water industry) Factor
Nature of Impact (=),(+),(-)
There is no political pressure across world in exporting athletic apparel and footwear (+)
Continuous compounded annual growth rate (CAGR) @8% has been observed in this industry in Australia from 2008-2012 and component annual growth rate of @0.8% has been observed in this industry in US. (+)
Customers had shown goods growth trend Since 2008
Compression apparel is highly specialized category in athletic apparel market, Dakz has already started manufacturing, compression apparel along with broad range of perfumes etc. (+)
Information has not been provided in the case about environmental issues. N/A
Some Regulatory barrier has been imposed on wholly foreign owned companies in some Asian countries. (-)
Overall – On the basis of analysis – the future growth of athletic apparel market could be expected to increase.
Key Factor promoting future growth as as follows :-
Strong growth in Demand
Continuous growth in demand of compression apparel.
Reduction in cost of manufacturing due to outsource of manufacturing in china.
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